INTER-AMERICAN

DEVELOPMENT BANK

Innovative Financial Instruments to Support

Energy Efficiency:

Experiences from Financial Institution in Latin-

America and Asia-Pacific region

Christiaan Gischler

ALIDE Offices,

San Isidro, Lima Peru

November 15, 2016

EXPERIENCE FROM THE CARIBBEAN ENERGY EFFICIENCY

Renewable Baseload

Fossil fuel baseload

Energy efficiency

Renewable Intermittent

Untapped Renewable Energy (RE) and Energy Efficiency (EE) potential

Size of the bubble is potential in MW

190 MW

160 MW

23 MW 250 MW60 MW

50 MW

200 MW

(500,000)

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

- 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20

Bar

rels

of

Oil

Dis

pla

ced

Levelized Cost of Energy (US$/kWh)

Solar PV

Natural Gas Jamaica

Solar water heating (OECS)

Energy Efficiency

Waste to energy

Wind

Geothermal (OECS)

Sustainability: energy efficiency & RE

Hotel Sector Electricity Cost Share of GDP in the Caribbean

0.05%

0.31%

0.1% 0.1% 0.2%

0.5%

0.9% 0.9% 1.0% 1.0%1.2% 1.2% 1.2%

1.4%

1.7%

2.3%2.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Ho

tel S

ect

or

Ele

ctri

city

Co

st a

s %

of

GD

P

Hotel expenditures on electricity can represent more than 2% of total

national GDP in smaller countries.

Energy Use in Hotels (results from CHENACT)

Savings potential of 30-40% in energy and 40-50% in water

End-use electricity consumption and savings (kWh)

Air

Conditioning

and Lighting

account for

nearly 2/3 of all

electricity

consumed in

Hotels.

IMPLEMENTING A MODEL TO HARNESS ENERGY EFFICIENCY

Estimated impact of the intervention on a single building/hotel

8

Business As Usual (BAU)

After Intervention

Efficient LED lights Intelligent lighting Efficient computers &

electronics Energy Efficient

Condensers ≈85kW roof mounted

solar PV Training to bldg. users

Est. US$475,000

Electricity consumption= 1.5 GWh/yrTariff= 0.27 US$/kWhElectricity savings over BAU=0%Annual Savings=US$0Electricity bill=US$420,000

Electricity consumption= 1.1 GWh/yrTariff= 0.27 US$/kWhMandated electricity savings over BAU=25%Annual Savings=US$105,000Electricity bill=US$315,000Simple payback=4.5 years

9

Savings used for investment in future buildings

Savings returned to building as lower elec. bill

Monitoring entity costs

Loan repayment (interest +principal)

Hotel 1: After Intervention

Mandated 25% savings (US$105,000) over BAU allocated as…

If more than 25% savings over BAU achieved…

Savings to energy company

Savings to building as lower elec. bill

Allocate savings $ in the following way….

Year 1 Year 2 Year 3 Year 4 …..Year 10 onwards

Use savings $ and IIC/IDB funding draw-downs to ramp up # buildings/hotels retrofitted

10

Savings=$0IDB loan=$2.1m

Savings=$0.2mIDB loan=$1.9m

Savings=$0.5mIDB loan=$1.6m

Savings=$0.7mIDB loan=$1.4m

Savings=$2.1mIDB loan=$0

Model assumptions: Bldgs similar profile IDB loan conditions

US$0.27/kWh avg tariff Tariff growth 1% p.a.

3 buildings retrofitted every year…

Increasing savings + decreasing loans : more # of buildings/hotels retrofitted with less initial capital requirements

11

IDB Yr 7 Loan=$0

IDB Yr 1 Loan=$2.8m

4 4 4

3 3 3

2 2 2

3 3 3

4 4

5

6 6 6 6

7

12

•Largest overall guaranteed savings

•Largest direct savings for the buildings

•Largest number of buildings retrofitted

•Shortest time of implementation of the intervention

Evaluating Criteria

MOVING FORWARD

Solar WaterHeaters

EE appliances and lighting Advanced Information and Communication Technology

Clean fuels & diversified energy

sources

Moving Forward: Smart grids, smart buildings and interconnectivity

THANKS

Christiaan Gischler

Lead Energy Specialist

christiaang@iadb.org

1-202-6233411